SESC Latest Topics No.26«July 2016»

Last Updated : July 26, 2016

Court injunction against Repair House Co., Ltd. and its manager.

«Summary»

In response to a petition filed on May 20, 2016, by the SESC with the Tokyo District Court for an injunction against Repair House Co., Ltd. and its manager to prohibit and suspend them from engaging in Investment Advisory/Agency business and Type II Financial Instruments Business without statutory registration, a court order was issued as per the content of the petition.

Recommendation to impose an administrative penalty order against an employee of a contractor of PIXELA CORPORATION and two other companies for committing insider trading related to shares of PIXELA CORPORATION and the two other companies, and against an officer of a contractor of PIXELA CORPORATION for communicating insider information, and against two offenders who committed insider trading related to shares of PIXELA CORPORATION using the information provided.

«Summary»

The SESC recommended that the Prime Minister and the commissioner of the FSA impose an administrative penalty order of 790,000 yen against an employee of a contractor of PIXELA CORPORATION, GALA INCORPORATED and SHODENSYA Co., Ltd. (hereinafter referred to as “offender (1)”), and 5,620,000 yen against an officer of a contractor of PIXELA CORPORATION (hereinafter referred to as “offender (2)”), and 2,470,000 yen against an offender who received the information from offender (1) (hereinafter referred to as “offender (3)”), and 8,780,000 yen against an offender who received the information from offender (1) (hereinafter referred to as “offender (4)”).

Based on an inspection, the SESC determined that offender (1) had committed insider trading by purchasing shares of PIXELA CORPORATION, GALA INCORPORATED and SHODENSYA Co., Ltd. using the insider information, that offender (2) had communicated insider information concerning PIXELA CORPORATION, and that offender (3) and offender (4) had committed insider trading by purchasing shares of PIXELA CORPORATION using the insider information provided, in violation of the Financial Instruments and Exchange Act.

Filing criminal charges against three persons suspected of committing market manipulation.

«Summary»

The SESC filed charges against three persons suspected for violations of the Financial Instruments and Exchange Act with the Tokyo District Public Prosecutor’s Office.

Suspect A, in conspiracy with Suspect B, committed market manipulation with regard to the shares of YUME NO MACHI SOUZOU IINKAI Co., Ltd. (“YUME NO MACHI”), listed on JASDAQ of Tokyo Stock Exchange, Inc., for the purpose of aiming to raise the price of the share.

Suspects A and B raised the share price of YUME NO MACHI from 850 yen to 1,050 yen, by committing market manipulation as described below, on six trading days between July 17,2013, and July 24, 2013.

Suspects A and B, for the purpose of inducing sales and purchases of the shares, conducted a series of sales, purchases and entrustments of the shares that would mislead others into believing that sales and purchases of the shares were thriving and would cause fluctuations in the price of the shares.

They purchased 221,300 shares, by using methods such as placing a series of limit purchase orders at prices higher than the previous quotations and executing the orders at increasing prices, under the name of suspect B and the other two persons via five securities firms, and made entrustments of purchases of 18,100 shares, by using methods such as placing a large amount of limit purchase orders at prices lower than the previous quotations, under the name of suspect B and another person via two securities firms.

They conducted fake sales and purchases of 167,400 shares without the purpose of transfer of right by selling and purchasing the shares at the same time, under the name of suspect B and two other persons via six securities firms, for the same period, for the purpose of misleading others about the state of sales and purchases of the shares such as misleading others into believing that sales and purchases of the shares were thriving.

Suspects A and B raised the share price of YUME NO MACHI from 1,653 yen to 1,800 yen, by committing market manipulation as described below, on three trading days between December 30, 2013, and January 7, 2014.

Suspects A and B, for the purpose of inducing sales and purchases of the shares, conducted a series of sales, purchases and entrustments of the shares that would mislead others into believing that sales and purchases of the shares were thriving and would cause fluctuations in the price of shares.

They purchased 147,000 shares, by using methods such as placing a series of limit purchase orders at prices higher than the previous quotations and executing the orders at increasing prices, under the name of suspect B and another person via two securities firms, and made entrustments of purchases of 9,000 shares, by using methods such as placing a large amount of limit purchase orders at prices lower than the previous quotations, under the name of suspect B and another person via two securities firms.

They conducted fake sales and purchases of 59,300 shares without the purpose of transfer of right by selling and purchasing the shares at the same time, under the name of suspect B and another person via six securities firms, for the same period, for the purpose of misleading others about the state of sales and purchases of the shares such as misleading others into believing that sales and purchases of the shares were thriving.

In addition, Suspect A, in conspiracy with Suspects B and C, for the purpose of stabilizing the price of the shares, conducted a series of sales, purchases and entrustments of the shares.

They stabilized the share price between 1,184 yen and 1,223 yen by conducting purchases of 587,900 shares, by using methods such as placing a series of limit purchase orders at prices higher than the previous quotations and executing the orders at increasing prices, under the name of corporation D and three other persons via six securities firms, and conducted entrustments of purchases of 156,200 shares, by using methods such as placing a large amount of limit purchase orders at prices lower than the previous quotations, under the name of corporation D and three other persons via five securities firms, on 20 trading days between April 28, 2014, and May 28, 2014, for the purpose of stabilizing the share price around 1,190 yen to prevent a margin call for margin trading under the name of Suspect A

The SESC appreciates assistance of Japan Exchange Regulation in this matter.